MUMBAI: Indian stock markets advanced for the second consecutive weekend as short covering and some value buying spurred a rally in power and

oil & gas stocks on Friday. The positive close is likely to continue into next week but in a tight trading range, as investors remain confused for want of clear direction.

“Next week will be positive for the markets with Nifty trading above 2800 level, where it has found good support. Bargain hunters are picking stocks which are available at attractive prices. Resistance for the markets is seen at 3250 levels," said Vijay Bhambwani, CEO-BSPLindia.

Stocks gained in Europe and US futures climbed Friday suggesting markets may rebound on rising speculation that the major central banks may go for another round of rates cut to unlock credit and boost consumer spending to arrest the economic global slowdown.

“Given the global economic slump and to bolster credit availability to the industry we may also see another round of rate cuts in coming days. Monday, Indian markets are likely to see gap-up opening while profit booking is likely to come in late trading. Immediate resistance for Nifty is seen at 3030 level and then at 3150-3200 levels. Support is at 2900-2850, breach of the above level may take it to 2750,” said Ankit Sinha, CEO-Spark Advisory.

Bank of England and European Central Bank on Thursday reduced their benchmark rates in an effort to limit the economic damage.

For the mid to long term, the news flow is going to be bad but it's already discounted in the stock prices.

According to analysts, the worst may be over for equity markets, but the recovery will take time. However, the pain is not over for the real economy. Weakness will be felt well into the first half of 2009. It's only as we get the lag effect of the change in monetary policy and the benefits of low commodity and energy prices that you should start to see economies recovering in the second half of the next year.